International Evidence on Food Consumption Patterns: An Update Using 2005 International Comparison Program Data
by Andrew Muhammad
, James L. Seale, Jr., Birgit Meade
, and Anita Regmi
Technical Bulletin No. (TB-1929) 59 pp, March 2011
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In a 2003 report, International Evidence on Food Consumption Patterns, ERS economists estimated income and price elasticities of demand for broad consumption categories and food categories across 114 countries using 1996 International Comparison Program (ICP) data. This report updates that analysis with an estimated two-stage demand system across 144 countries using 2005 ICP data. Advances in ICP data collection since 1996 led to better results and more accurate income and price elasticity estimates. Low-income countries spend a greater portion of their budget on necessities, such as food, while richer countries spend a greater proportion of their income on luxuries, such as recreation. Low-value staples, such as cereals, account for a larger share of the food budget in poorer countries, while high-value food items are a larger share of the food budget in richer countries. Overall, low-income countries are more responsive to changes in income and food prices and, therefore, make larger adjustments to their food consumption pattern when incomes and prices change. However, adjustments to price and income changes are not uniform across all food categories. Staple food consumption changes the least, while consumption of higher-value food items changes the most.
Keywords: ICP 2005, high-value food products, consumption patterns, marginal share, income elasticity, price elasticity
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This report, originally released in March 2011, was revised in February 2013 to correct the ordering of country names in the appendix tables. Additional clarifications to the data and estimation methods used were added to pages 1, 11, and 18.